On January 24, 2018, 15 Kentucky Medicaid enrollees filed a lawsuit in the U.S. District Court for the District of Columbia challenging CMS’s authority to issue the work requirement policy and approve the Kentucky waiver. This issue brief answers 5 key questions about the Kentucky Medicaid Lawsuit.

On January 11, 2018, the Centers for Medicare and Medicaid Services (CMS) issued a State Medicaid Director letter announcing a new policy that, for the 1st time, allows states to condition Medicaid on participation in a work or “community engagement” program. The next day, CMS approved a new Medicaid waiver in Kentucky. The waiver includes a program called Kentucky HEALTH, which encompasses a work requirement as well as coverage lockouts of up to 6 months for failure to pay monthly premiums (up to 4% of income), timely renew eligibility, or timely report a change in circumstances, among other provisions. Kentucky HEALTH applies to most nonelderly adults, including low-income parents and expansion adults. The state plans to implement Kentucky HEALTH by July, 2018.

Key Questions in the Kentucky Medicaid Lawsuit Guide

1. WHO ARE THE PARTIES IN THE LAWSUIT?

The complaint describes the 15 plaintiffs as “housekeepers and custodians, ministers and morticians, car repairmen, retired workers, students, church administrators, bank tellers, caregivers, and musicians.” They range in age from 20 to 62, and rely on Medicaid for services such as check-ups, treatment for chronic conditions such as diabetes and high blood pressure, mental health and substance use disorder counseling, prescription drugs, and vision and dental care.

2. WHAT ARE THE PLAINTIFFS ASKING THE COURT TO DO?

The plaintiffs are asking the court to declare that the work requirement policy and Kentucky’s waiver are illegal and cannot be implemented because they violate the Administrative Procedures Act (APA), the Medicaid provisions of the Social Security Act, and the President’s Constitutional duty to take care that laws are faithfully executed.

3. WHAT HAS CMS SAID ABOUT ITS AUTHORITY TO ISSUE THE NEW POLICY AND APPROVE THE KENTUCKY WAIVER?

CMS’s new policy explains that it is allowing waivers to test whether “requiring work or community engagement. . . will result in more beneficiaries being employed or engaging in other productive community engagement, thus producing improved health and well-being.”

4. WHAT ARE THE LEGAL QUESTIONS FOR THE COURT?

HHS relied on its authority under Section 1115 of the Social Security Act to issue the work requirement policy and the Kentucky waiver.

5. WHAT ARE THE NEXT STEPS?

The defendants have 60 days to respond to the complaint. They also need to file with the court the administrative record that forms the basis of the agency’s decisions. The plaintiffs are seeking to have the case certified as a class action on behalf of all Kentucky residents enrolled in Medicaid on or after January 12, 2018, a group that they anticipate numbers in the hundreds of thousands. The plaintiffs also are asking the court for a preliminary injunction, which would prevent implementation of the work policy and the Kentucky waiver until a final decision in the case.
For a look at the full Issue Brief, Click HERE.

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